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The Right Way to Do a Cold Call
Cold calls often come with a negative connotation. However, when done correctly cold calls can successfully turn into lucrative business opportunities. As an entrepreneur you will have to make many cold calls, whether it be to a potential investor, supplier, distributor, etc. The goal of a cold call should not be to close a deal or get an investment. To the contrary, it should always be to open a line of communication with the other party. These 6 tips will teach you about the right way to do a cold call.
- Do your research-
Before making the call make sure you know as much about your prospect as you possibly can. If you are looking for an investor check to see if they have invested in other start-ups in the past, their interests, the industry in which they work, etc. In order to appeal to your prospect, this will help you frame your approach for the best outcome. This includes answering questions such as, what is the goal of the call? What can you offer the person at the end of the line? Why should they care? And why is your solution worth their time?
- Focus on starting a relationship-
Don’t sell anything, other than yourself, on the first call. The first call should be about the early building blocks of a relationship. This means that you should not be trying to get an investment. Making a good impression will be worth it down the road, even if you do not get the investment or partnership you desire. On this first call you should be introducing yourself and your business. Briefly explain why your business is worth the attention of this party, and work towards booking an in-person meeting. Describe your talents, ask questions, and more importantly, carefully listen to what the person on the other line is saying. They may casually mention things about themselves that will allow you to build better rapport down the line.
- Look for a second-degree connection-
Having a mutual acquaintance will help you with credibility. People are likely to take calls from others when they have been recommended by someone they trust. Prior to conducting a cold call, check your network to see if you know any of the same people. If you are on good terms with your mutual acquaintance, ask them to put in a good word for you. Also, ask people in your network if they know anyone offering what you are looking for. If you get to their voicemail make sure to mention referrals, as it is likely to lead to a call back for you.
- Get to the point-
Time is money. People are busy and usually have their days planned out. An unexpected cold call may interfere with what they have scheduled. Make sure you are efficient and quick to get to the point. Prepare your talking points beforehand, and address only the matters that will spark enough attention for a second meeting.
- Get to the second meeting-
Once you’ve shared enough information to pass the introductory stage, ask to book second meeting. If your prospect seems to have a busy schedule offer to email a slide-deck summarizing what you’ve just discussed until you are able to meet again.
- Keep records-
Document those you’ve called, for what reason, when you called, and how many calls have resulted in scheduled appointments. Doing so will not only keep you organized, it will allow you to keep tabs on cold-calling techniques have worked and which have not. Furthermore, a “no” from a prospect, can simply mean a “no” for the time being. This will let you know which prospects you can follow up with in the future.
Cold-calling can seem intimidating. But, if done right, it could lead to a promising partnership. Do not be discouraged with rejection either. Many opportunities can arise in the future with these same prospects, and you’ve also garnered many tools and lessons along the way. Just remember to be informed, quick, and efficient.
The Importance of Emotional Intelligence
In a room full of equally smart people the one who stands out is the one who appears as most interested. Emotional intelligence is probably one of the most underrated entrepreneurial skills. It was brought to mainstream attention by Daniel Goleman, in his book, Emotional Intelligence. It is the ability to identify, use, understand, and manage emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and diffuse conflict. Technical skills and expertise is the foundation of the product development stages. Conversely, a high degree of emotional intelligence is what will keep an entrepreneur’s company afloat. Networking, presenting, pitching, and working with others, all require a high level of emotional intelligence. Here are 3 important reasons why emotional intelligence is arguably just as important, if not more, than IQ.
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Building better relationships:
The relationships you build will be the reason for profitable present and future opportunities. Relationships with business partners, employees, customers, and investors will drive the quality of work created, the workplace environment, and the appeal you have to potential investors and stakeholders. Building healthy relationships in the workplace means understanding the diversity in people’s behaviours, and adapting accordingly.
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Stress management:
Emotional intelligence is said to moderate the relationship between mental health and stress. Being an entrepreneur isn’t the most stable of jobs, and the unexpectedness of it all can cause a tremendous amount of stress. People with high emotional intelligence can better reduce stress because of self-awareness. Goleman explains that self-awareness allows for people to identify the moment when stress is likely, and therefore calm-down before their stress becomes unmanageable. As well, empathy and social skills allows emotionally intelligent people to better communicate how it is that they are feeling and find solutions to such problems.
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Understanding your brand:
Emotional intelligence is crucial for successful marketing. This is two-fold. For one, a marketer must be able to empathize with his target market. A person with high emotional intelligence will ask the right questions in order to understand the needs of customers. these questions relate to customer expectations, emotional factors that drive the need for the product at hand, and satisfaction that customers receive from the product. At the same time understand that your brand, must too, have its own emotional intelligence. In this day and age people define themselves based on the clothes they wear, cars they drive, the jobs they have, etc. It is the responsibility of the brand to represent its customers and adapt to the customers’ changing phases and behaviors.
Some can develop higher emotional intelligence through exercises and training. Google has even started giving emotional intelligence courses to employees. But let’s be realistic. For some it is just not that simple, and that’s perfectly fine. In such a case, entrepreneurs can benefit from partnering with individuals who have what they lack. It is important however to acknowledge that your IQ will only take you so far. At the end of the day, once you’ve developed a great product, what will draw investors, employees, and customers to your company is your emotional intelligence. You will have to communicate effectively with investors, overcome challenges and diffuse conflict in the workplace, and empathize with customers, all while managing your emotions, stress and other responsibilities. As the old saying goes, it takes something more than intelligence to act intelligently.
The Challenges of Being a Social Entrepreneur
Let’s start off by addressing that being an entrepreneur is difficult. However, being a social entrepreneur brings about its own set of challenges and obstacles. It combines social impact with sustainable business growth. Social entrepreneurs are faced with having to solve or alleviate a real-world issue while also maintaining positive financial performance. . Here are the two main challenges social entrepreneurs face. Though considered challenges, many have overcome them in the past.
1. Competing on prices while having enough money to make a social impact
In order to remain competitive, social enterprises need to take advantage of creative pricing strategies. Social entrepreneurs need to establish a pricing strategy that will consider price point, allowing for enough revenue to serve their chosen cause, without compromising their customers’ expectation of their product. Though social enterprises have to overcome additional challenges when pricing, they can use original pricing techniques that are not as readily available to other start-ups. Social entrepreneurs should strategically highlight their cause and mission. Socially conscious consumers who agree with this mission will be willing to purchase at a higher price point in order to support the cause. Furthermore, bundling will incentivize sales. Shoe company, Toms, has made great use of this. For every shoe sold, a pair is donated someone in need. In order to build and grow brand equity, social entrepreneurs should also look into certification. For instance, being certified as fair trade, or B Corp will help maintain a positive reputation and better positioning.
2. Quantifying your impact
Measuring impact for social entrepreneurs can be complex. Not only do you have to establish metrics for your business performance, you have to measure your social impact to prove credibility, as well as attract investors and potential business partners. Impact investments are investments that not only yield financial return, but social and environmental return as well. With the rise of the number of social enterprises, credible organizations have developed frameworks to standardize the calculation of social impact. The IRIS Framework consists of an organization’s description, product description, financial performance, operational impact, and product impact. If your mission is to have impact on a global scale, The Global Impact Investing Ratings System (GIIRS) gathers a range of information with regards to company’s work, size, sector, and region. These assessments are carried out annually and validated by the GIIRS.
Many resources are available to Montrealers looking to take a step into social enterprise. Luckily, numerous grants, and funding opportunities are available, that do not require giving away equity or paying back an investor. YES Montreal, Futurpreneur, Quartier de l’Innovation and PMEMTL all offer workshops and/or grant opportunities for social enterprises in the city, just to name a few.
With millennials harnessing the wave of activism and social awareness, social entrepreneurship has risen for the past decade. They are working towards incubating ground-breaking innovations, alleviating life-threatening issues, and pioneering some of the future’s most resourceful projects. While it is true that many obstacles can interfere with business operations, the key is taking advantage of the resources available your given city and finding creative ways of overcoming these challenges.
Ugo Smoothies
Jewish Businesses Changing the World
Jewish Businesses Changing the World
How to Read an Income Statement
financials
For many new in the business world, reading an income statement can be a confusing and intimidating experience. However if you know where to look you will realize that it is not as intimidating as it may appear. Understanding an income statement is a very important skill to have for entrepreneurs as it aids with making sound business decisions. Basically, an income statement tells you how much money came into your company during a specific period, how much a business spent in order to generate income, and how much profit a business has after having paid all expenses. Here are a few points that will make income statements easier to understand.
- Income statements cover a period of time
Before you delve into reading the income statement, make sure to take note of the specific time period covered. Questions you should be able to answer for the said period include: What are the revenues of the company during the period? Have the revenues increased or decreased over the last few periods? What are the various components of cost? How profitable was the company during this period? What are the earnings attributable to a share or the Earnings per Share?
- Income statements follow a simple formula
Income statements may have slight variations, depending on the company. However, they all possess the same data. Essentially, total revenue, total expenses, and net income (Total revenue-total expenses= Net income). Additional information is simply added in order to give the reader a more detailed depiction of financial status.
- Don’t let the jargon throw you off
What can make income statements difficult to understand is wording. Keep in mind that businesses can use different words to describe the same concept. For instance, the term “sale” or “income” can be used instead of “revenue”. The word “expenses” can be used instead “costs.” “Profits” and “net income” are also interchangeable.
- Expenses are often split into different parts
Expenses tend to be broken down into components. Cost of Goods Sold is the direct cost attributable to goods sold. Selling, General and Administrative Expenses combines payroll costs, except for what has been included in labour costs. Depreciation and amortization are charges with regards to fixed and intangible assets that have been capitalized on the balance sheet over time. Sales & marketing, as well as Research & Development costs are also almost always included in income statements.
- Keep an eye for cash flow
Comparing an income statement to a cash flow statement is highly recommended. The reason for this is to see if the profits earned are supported by the cash coming into the company. High profits on an income statement paired with low cash flow can imply weak quality of earnings. Know your key drivers and manage them. Keep a careful eye on areas that affect cash flow: accounts receivable collections and inventory turnover. How are you doing compared to past performance and your peers? Watch key areas that affect profits, net and gross margins, labor and fixed asset utilization. Though this is more acceptable with start-ups since they likely have to make substantial inventory investment before collecting from customers, this is something that should improve over time.
- Take note of the profit margin and earnings per share
The profit margin will give you an indication of the percentage of revenue that is left for shareholders after expenses are paid. Earnings per share will tell you the portion of earnings you would be entitled to if you owned one share.
Income statements can be very intimidating if you are a first-time business owner. If you are an entrepreneur needing help with your financial statements, remember that some aspects of running a business are not worth saving money on. There’s no need to turn yourself into a CPA, but you must be able to read financial statements, talk with better qualified financial people and assess your company’s performance.This will lower your stress level and get the job done efficiently.
PME Mentor: Nancy Cleman
Mentorship is at the heart of PME’s success. On this 18th anniversary, it would only be appropriate to give thanks to our mentors. Our mentors spend countless hours helping our entrepreneurs reach their full potential. We recently got the chance to catch up with our longtime mentor, Me Nancy Cleman. Nancy is a member of the Quebec Bar and the law society of Upper Canada. Over her years of experience, she has provided legal advice to a variety of corporate and commercial clients, including a range of industries such as software, fashion, film and services for the elderly. Nancy is also an accomplished speaker and author. Here are her thoughts on mentorship, and why it matters.
Q: What aspects of mentorship do you enjoy most?
A: What I enjoy most about mentorship is being introduced to entrepreneurs and learning about their visions. Speaking to them and offering guidance businesses they are seeking to build is an essential part of being a mentor. I enjoy offering perspective and working collaboratively with entrepreneurs.
Q: How can an entrepreneur make the best out of their relationship with their mentor?
A: The entrepreneur can make the best of the relationship by respecting the relationship that is being built with a mentor. As mentors, we get many calls, however often times there is no follow up. The relationship of mentor and mentee is one of respect and trust. Mutual trust and respect is the only way of getting the work done in an efficient manner.
Q: What advice would you give an entrepreneur thinking of working with a mentor?
A: It is important to listen and to be clear with the facts. Thank the mentor for his or her time. If you have an appointment then keep it or tell the mentor, you cannot make it. Mentorship is a rewarding relationship for both parties. As a mentor, I benefit from the opportunity to learn new things and share my experiences.
Our mentors are passionate people dedicated to helping others. With their help, entrepreneurs have been able to reach great heights. Thanks to the efforts and unwavering dedication of professionals like Nancy, we look forward to what the next 18 years have in store for PME.
What Is an Economic Moat?
The term economic moat, coined and popularized by Warren Buffett, refers to a business ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms. Imagine McDonald’s without cost, convenience and golden arches, Nike without technological and trademarked innovation, or Amazon without its timely customer service innovations. They would be relatively unpopular companies struggling to survive in their respective industries. Business mogul, Warren Buffet has introduced the world to many of his lifelong lessons over the decades. One of the lessons that seems to have stayed relevant throughout the years is related to the coined term, “economic moat”.
As the age-old saying goes: Being the best is great because you’re number one, but being unique is greater because you’re the only one. Buffet has explained the importance of economic moats specifically when describing his investment strategy. His strategy centers on companies with strong economic moats, as they are more likely to withstand their competitors, and remain successful and unique. A company having a competitive advantage that further differentiates it from the competition will help through the highs and lows of operating a business. In its most basic form, a company without an economic moat is like a movie without an engaging hero, or storyline. In such a situation, there would be no way of creating a loyal consumer following, and subsequently no way of overcoming challenges that arise over time. On the other end of the spectrum, companies with competitive advantages can be threatened by competitors who replicate their methods. Establishing economic moats can therefore help companies protect long-term profits.
Thankfully for today’s business leaders, Buffet didn’t simply coin a theory-based term that required a bunch of scholarly analysis. The concept of building economic moats is a tangible one that can be leveraged through different business strategies. For instance, economic moats can be achieved in five ways: cost advantages, the network effect, high customer switching cost, efficient scale and intangible assets. The way you choose to build your economic moats all depends on the nature of your business. Think about what would be a good fit for the strategy you plan to execute. Buffet emphasizes the economic moat as an institution. It is not the mere elements that customers will like. Companies that build moats carve them around their businesses to keep competitors at bay. For instance, people loved Coca-Cola 50 years ago, and it’s fair to assume that they will 50 years from now. This is because Coca-Cola utilized the five sources of economic moats in order to create a loyal consumer base.
Let’s use the example of low-cost advantage. Suppose you have decided to make your fortune by running a lemonade stand. If you buy lemons in bulk once a week instead of every morning, you can reduce your expenses by 30%. This allows you to undercut prices of competing lemonade stands. While profits would increase, it wouldn’t take long for competitors to notice your method and replicate it. However, suppose you develop and patent a juicing technology. This technology would allow you to get 30% more juice out of the average lemon. This time, it would be a lot more difficult for the competition to duplicate. In this example, your economic moat is the patent that you hold on your proprietary technology.
The nature of capitalism is that others will want to come in and take what you have built. The goal for every business should be to build a durable fort around its castle. The goal is to protect it from any attack that would come from the competition. Sometimes an economic moat is having more talent, other times it’s establishing legally protected patents. Just remember to remain patient. You should stay persistent because it may even take a few tries until you get your strategy right.